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Asian Forex equities rose as the all-important US Consumer Price Index (CPI) data confirmed Federal Reserve (Fed) pause bets. The risk gauge, the S&P 500 futures in the United States, is up about 0.30% on the day.
The annual inflation rate in the United States reached 3.7% in August, compared to a 3.6% increase forecast. The CPI jumped 0.6% in August, the highest monthly advance since 2023, although it was in line with market expectations. The core CPI climbed by 0.3% and 4.3%, respectively, compared to expectations of 0.2% and 4.3%.
Forex market pricing in a Fed rate rise.
Forex markets are still pricing in a Fed rate rise pause next week, whileAccording to the CME Group’s FedWatch Tool, the chance of a November rate rise remains at 40%. Fed predictions remain dovish, which appears to be impacting on the US Dollar and US Treasury bond rates in European trading.
The Australian Dollar is the strongest currency in the G10 FX currency basket, followed by the Japanese Yen, and the Canadian Dollar is the weakest heading into the European session.
At about 0.6435, the AUDUSD is maintaining robust Australian job data-driven gains. The Australian economy created 64,900 jobs in the previous month, led by part-time work, according to ABS statistics released Thursday. The unemployment rate remained unchanged at 3.7%, as predicted.
Despite a recent rally, the USDCAD is trading below 1.3550. a stop in the oil price surge. WTI is holding steady at ten-month highs of $89.
The USDJPY is being pushed toward 147.00 as the Japanese Yen gains strength following statements made by Japan’s newly appointed Economy Minister Yoshitaka Shindo. Shindo has stated that he “will mobilize all possible policy measures to support the economy.” Weaker US Treasury bond rates are also putting pressure on the major.
In the run-up to the ECB meeting, EURUSD is maintaining its recovery mode at 1.0750. The central bank is largely anticipated to keep key interest rates unchanged later in the day. The latest economic predictions and President Christine Lagarde’s speech will be crucial in providing signals on the ECB’s future policy route as well as a clear direction for the Euro. . According to Reuters, which cited sources, the ECB’s quarterly predictions see inflation exceeding 3.0% in 2024.
